09 October 1989: E-commerce pioneers assemble

Many businesses were familiar with data communications in 1989, but information transfer from one organisation to another was still rare. The tail end of the 1980s was, however, a time of high expectations for ‘value added’ network services, electronic invoicing between traders and paperless administration methods for importers and exporters. More and more organisations in Ireland were paying attention to international projects, technology trials and standards development. And a small band of early adopters was keen to raise awareness that things were happening inside the country as well.

Against this backdrop a new business association, the EDI Association of Ireland (EDIAI) held its first annual general meeting in Dublin on 09 October 1989. The event followed exploratory meeting in February, which had decided to set up a national forum and information source for anyone with an interest in electronic data interchange (EDI).

The launch of the EDIAI kick-started business-to-business network services in Ireland. Delegates from 42 member companies attended the October meeting. They included the country’s two biggest banks, the top computer vendors, large state-owned enterprises and consulting firms in search of opportunities to sell advice on electronic trading. The attendees exchanged views on the potential to streamline supply chains and international transactions and elected a council to manage the affairs of the new organisation.

EDI was the most prominent form of electronic commerce before that term was invented. It ushered in a new generation of online services. Yet it also retained the top-down rules and centralised controls of old-school telecommunications – bureaucratic and expensive structures that the internet would sweep away in the 1990s.

Ireland was a relative latecomer to EDI. The technology had evolved in industry-specific schemes in areas like automotive manufacturing, chemicals and insurance. Most of the action had taken place among large enterprises and in the larger economies. Most of the existing projects involved proprietary software. Now, however, the United Nations was promoting a common transaction standard known as Edifact and the European Commission was introducing measures to extend the benefits of EDI across more firms and into those countries where it was less common.

One of the innovators in Ireland was Philips Electronics, which had connected the Digital Equipment facility in Galway into its internal transaction processing systems. This facilitated sales of its semiconductors to the computer maker. Another pioneer was Data Packaging, a precision plastics company company in Mullingar, which sent its first electronic invoice to IBM’s personal computer factory in Scotland in June 1989. Cargo Community Systems (CCS), a new Irish company formed by a consortium of airlines and freight forwarders, also had high ambitions. CCS had drawn up plans for an international pilot system, based on Edifact, that would extend EDI into the air cargo industry. Philips was developing some of the enabling software.

The EDIAI drew its first leaders from these projects. It chose Michael Giblin, an Aer Lingus manager who had recently taken charge of CCS, to chair the council. Howard Bell from Philips Electronics became its secretary. The other council members came from AIB, An Post, Arthur Young, Bank of Ireland, Bell Lines, Digital Equipment, EDI Matrix, Eolas and IBM.

The new association surfaced shortly before the first Irish-based EDI service providers. Two state-owned companies were preparing plans in collaboration with partners that already ran EDI operations elsewhere. An Post’s PostGem subsidiary launched its PostEDI service in October and Telecom Eireann’s Eirtrade announced an alternative scheme in the following July. Both companies offered highly structured services for closed user groups. Both targeted supermarket chains and their larger suppliers. The result was separate islands of online activity that both grew rather slowly.

Complicating the picture further, in January 1990 the government instructed Telecom Eireann and An Post to join forces and create a ‘national communications company’ to provide EDI capabilities for the Customs and Excise Service. They proceeded to establish the International Electronic Trading Agency (INET), which set up a managed network to handle electronic versions of import and export documents. The joint venture arrangement not only led to friction between An Post and Telecom. Its commercial implications also sparked dissatisfaction in the EDIAI. Shortly before the INET network went live in April 1991, the association’s council issued a highly critical assessment of the project.

EDI made fitful progress in the early 1990s. The EDIAI commissioned Ernst & Young and Price Waterhouse to survey usage levels in 1991. These consultants reckoned that no more than 100 to 150 businesses were implementing EDI. Edifact turned out to be more complex than its advocates had suggested and more expensive than its adopters had hoped. And when the Single European Market came into effect in January 1993, simplifying cross-border trade overnight, it took most of the urgency out of the scheme to automate customs processes.

Newer technologies overtook EDI in the years that followed. Internet email provided a cheap and easy way for traders to send and receive documents like orders, invoices and statements. Email lacked the focus and sophistication of dedicated EDI services. But it proved to be an adequate alternative for many companies, particularly in manufacturing industry, and was accessible by all. After the World Wide Web took off in mid-decade businesses could also consider more radical approaches to online buying, selling and transaction processing.

In May 1996 the EDIAI changed its name to the Electronic Commerce Association of Ireland (ECAI) and started to recruit members who had not traded online before the internet. Most of the earlier participants were technology specialists, but many of the newcomers came from sales careers. The ECAI remained active until 2001, when it merged quietly into the Irish Internet Association.

Howard Bell
EDIAI honorary secretary

A group of like-minded enthusiasts in Ireland started to discuss EDI in 1987 and formed the EDIAI in 1989. We all came from different businesses and had different backgrounds, but we had one aim in common: to reduce complexity. We wanted to improve the management of our business processes through the deployment of EDI, not only in our own organisations but also with our business partners.

At the time I was working as logistics manager for Philips Ireland and had become familiar with EDI through its parent organisation. In the 1970s Philips had developed internal message standards for exchanging electronic versions of its invoices, payments and orders. By 1989 the company was also heavily involved in the development of the EDIFACT standard.

Manufacturing, commercial, freight forwarders, airlines, banks, customs, standards, software houses, EDI service providers and business consultants were all represented in the EDI Association and on its council. Yes, we all had vested interests but that was never a roadblock in any of the meetings or discussions. There was always open communication with participants eager to help, share information and experiences about EDI.

At the inaugural meeting in October 1989, I was elected to the EDIAI Council as secretary. Besides our day jobs, Council members spent time sharing the EDI story and business benefits through presentations, breakfast meetings and via various business groups. We all realised that a few experts would not be sufficient to reap the benefits of EDI. We needed many!

Michael Giblin
EDIAI chairman

The EDI Association of Ireland was established by a small group of activists, who loosely knew each other from business and through various conferences. The organisational structure that they decided on was a limited liability company. This gave the association the flexibility to undertake activities of a commercial nature.

The need for EDI came about for a variety of reasons. Chief among these was the buyer/supplier relationship, particularly for those trading with multinational companies and especially with US partners. The purchasers were the dominant partners in these relationships and could dictate the terms of trade. The purchaser would also determine how order and other transaction information could be handled in the most efficient manner, often by taking direct input into its computer. This presented many problems, particularly where the supplier had many customers with proprietary systems.

During its first year the EDIAI created a forum to discuss specific technical issues on communications protocols, data standards and security issues. It must be remembered that at this time even professional IT personnel has no exposure to, and little or no expertise in, the technical aspects of EDI. There were also major concerns about legal issues and the need for the development of interchange agreements between corresponding parties. The association therefore decided to bring forward its own standard or specimen interchange agreement.’

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